Taking Savings Groups to the Road: PSP Implementation Manual Webinar



Taking Savings Groups to the Road: PSP Implementation Manual Webinar
Taking Savings Groups to the Road:
PSP Implementation Manual Webinar
Question & Answer session with manual author, marc bavois
What is CRS’ experience of switching groups from a free model with a field agent to a fee
service? Were there some groups that were frustrated with the process? Why is CRS not doing
away with field agent model altogether?
o We don’t think it’s viable to recruit an agent and have make cold visits to villages and
say they have a new product, and I want to be paid. We set up a short preparation
period for setting up the market for PSP.
o We don’t want to be in the situation where one group was receiving a free service, and
then had to pay. We want the agent to create some groups to be the product
demonstration, and the others will be created after the agent is certified and they will
have to pay. We are trying to create an example, then create the conditions where the
agent is there not supported by the product.
How does the group negotiate the price/how is the fee set?
o As the agents are getting ready to become PSPs, we have a training with them to
determine what will be the pricing strategy and what will be the marketing strategy. We
want to achieve a balance between attractive money for PSPs and affordable for group
members. This is based on an analysis of how much the fees are going to represent from
the perspective of members (compared to how much they are saving and earning)
o This is also how we help determine the FA stipend. It’s how we screen agents and
calibrate expectations of agents.
o In practice, a PSP is going to be certified and they have to have that final negotiation.
Then we work with them on their marketing technique. We want it to become the
market price that is known throughout the area, so when the PSP arrives to a new area
a price is expected.
Who joins the PSP groups? How do you target the poor or ultra-poor? Given the self-selecting
process, do you find that the more vulnerable join first or later? How do you look at people with
disabilities joining? Also, is there saturation in networks? What will happen when they are
saturated in a geographic area?
o On the first question, there is a question of joint savings groups and who joins fee for
service savings groups. One of the things that’s driving us is that were looking for a
saturation model. We want to stop the PSPs short of going downmarket. Now if you let
them operate from 1-3 more years and they keep going downmarket, what will happen?
o We’ve found that the very poor do not initially join groups, because they are risk averse.
It’s an open question to what extent over time they actually do join. That’s a central
concern of our new project.
Their primary fee setting model is the calibration of PSPs to the savings policies of the
group. A smaller group might save less, so flat fees might take a larger bite out of their
savings and be a bigger burden.
o We’re looking for PSPs that are working at a double bottom line- income and service
and spreading the benefits of the methodology. If you’re looking a saturation over time,
you’ll be able to see how we are doing over time.
o The networks are a way of organizing PSPs and make it more likely that they will stay
engaged for a long time
o We don’t know what does the future hold. That’s why we’re looking at diversifying
services. We are bringing additional trainings, looking at additional products. Having this
infrastructure in place will help us to cost-effectively introduce new services.
What is the profile of the average PSP agent? Do they sometimes start small businesses
aggregating other PSP agents to promote the model?
o Finding the right profile is key: we want to take our time and get the right person. We’re
looking for the lowest level profile that will let us succeed. If they have too high of skills,
they might have other opportunities and leave us.
o We want people who understand clearly that this is not a salaried position with
ourselves or a partner organizations, but a way to invest in themselves to create
livelihood opportunities
o We recruit men and women, and we have men and women put forward. In practice, the
project recruited agents are mostly men. The expectations we have of them- the
amount of time we want them to work and distance we want them to travel biases it.
That being said, we have women agents and the quality of their work is just as good as
the men and their productivity is often quite high.
o We have apprentices who are recruited from within the groups. This program has 75%
women members, and we have more women apprentices. There are lower expectations
about their overall output and the distance they can cover.
There are two levels of sustainability that the listeners are interested in: a business model
versus a model that is supported by donors, and how do you think in the future the PSP model
will be sustainable; and the sustainability of PSP networks.
o At some level, the donor start-up investment is going to be necessary in a new locality.
But how do you leverage that investment in a new locality as much as possible. Different
models are looking at different approaches, but we feel that the income factor for
agents is among the most important for sustainability.
o The networks are young, so we don’t really know their sustainability. We want networks
to be sustainable as long as they are adding value and of a high quality. But we don’t
want networks to take on a life of their own for the sake of having a PSP network. We
don’t yet have a clear sense of that, but we will be exploring more in our project with
o These investments help to get the infrastructure in place and get some trainers in place,
but then get out of the way. We want these projects to be as short as possible to reduce
the sunk cost and let things keep going.
Taking Savings Groups on the Road: PSP Implementation Manual Webinar. February 19th, 2014.
How can someone go about starting a PSP project? There are some questions about the manual,
trainings, different languages the manual might be available in. What is your advice to the
listeners who want to know how they can start this project?
o The implementation manual is available on the SEEP library. We have a translation in
French and that will be available soon. We have not yet made a decision on Spanish, but
we will be looking into it. The manual is quite comprehensive.
o We’re having this webinar to increase visibility, but we are planning an introductory
workshop at the next SEEP AGM. Based on demand, we might host a one-week training
with the Carsey Institute to share more expert advice.
o The manual is quite comprehensive. One of the keys is to keep in mind the pieces of
success. Start from day one and don’t shift midway. Trust and confidence, wanting it to
happen and persevering is very key to success.
What are the key challenges and obstacles, especially for those of us how have subsidized
models like VLSA, SILC?
o First is finding the right agents: screening for skills, attitude, and connections; watching
out for job seekers or people who are flight risk, including those who might want to go
back to school.
o The next context can be external. We want to go to an area that doesn’t have savings
groups already; we don’t want to duplicate investments. But where others have been,
we need to look at what kinds of projects they have been, have there been a lot of
handouts, etc.
o The next is really working hard with the agents to overcome natural tendencies to be a
bit lazy and work in their home villages, but instead to reach out to other villages. It
takes discipline to make sure that it happens. We need to counter this agent inertia.
Do you think the PSP model is more likely to attract clients who have been disappointed in
microcredit, or do you think a SILC model is more likely to attract them, or do we not have data?
o It’s not SILC or PSP. SILC is the group level model, and the PSP is on what terms people
trade. So I think that SILC, VSLA, savings for change, is for people who have been
disappointed by group credit and are looking for something additional, because they are
complementary. The product has broad appeal, banked and unbanked.
o If someone is willing to pay the MFI as a service provider, it is the equivalent of paying a
PSP as a service provider.
o We think as long as the PSP has a high value and is at a reasonable price people will be
willing to pay for it.
What are the areas of add-on that CRS is looking at for PSPs and/or SILC?
o There are two levels: the type of service (looking at services that leverage the skills of
agents). Business training, health training, etc. On products, we need something with
broad appeal
o With PSP there is an additional wrinkle, in that they will be more likely to want to pick
up a product or service that they can sell. We should restrict the offerings to something
that is viable commercially. We’re looking at business trainings, solar lamps, stoves, etc.
Taking Savings Groups on the Road: PSP Implementation Manual Webinar. February 19th, 2014.
One of the value add-ins of using the PSP approach is rather than having to hunt down
agents one by one and work with them, we have an aggregation. Each of the PSPs has a
large and growing portfolio so they can aggregate orders, etc.
The PSP network offers a really intriguing opportunity for distribution
Taking Savings Groups on the Road: PSP Implementation Manual Webinar. February 19th, 2014.